Saturday, December 21, 2013
If you are interested in a nice blend of theory and practice, and then are inclined to have a drink on somebody else's dime, you'll want to take in two events the AALS Section on Transactional Law and Skills is hosting at the AALS Annual Meeting in New York on January 3-4, 2014.
***Shameless promotion and conflict of interest warning: even though the esteemed Eric Gouvin, dean of the Western New England Law School and chair of the section asked me to post this, I'm one of the panel participants.***
First, the Section's program "Value Creation By Business Lawyers in the 21st Century” features Prof. Ronald Gilson (above left) as the main presenter. It is scheduled for Saturday January 4th from 4-5:45pm.
In 1984, the Yale Law Journal published one of the foundational scholarly articles in the study of transactional law, Professor Ronald Gilson’s “Value Creation by Business Lawyers.” In the years since its publication the article has fueled a robust debate on the role of business lawyers and the justification for the services they provide. On the thirtieth anniversary of that influential article this program will re-examine Professor Gilson’s thesis, evaluate the impact of the article, and discuss the prospects for business lawyers creating value in the 21st Century.
The program will have two parts-
(i) Part one will feature Professor Gilson, along with our two speakers (Professor Jeff Lipshaw and Professor Elizabeth Pollman). Professor Gilson will be speaking for approximately 20 minutes, followed by Professors Lipshaw and Pollman. [Ed: I've posted my essay "What Is It Like To Be a Beetle? The Timelessness Problem in Gilson's Value Creation Thesis."]
(ii) Part two will feature presentation of the two papers selected from the call for papers. We have two terrific papers selected for presentation: (1) Professor Susan R. Jones (The George Washington University Law School) & Professor Jacqueline Lainez (The University of Richmond School of Law) will present Viewing Value Creation by Business Lawyers Through The Lens of Transactional Legal Clinics, and (2) Professor Karl Okamoto will present Value Creation in StartUp Lawyering.
The panel will then be followed by 15 minutes of discussion and questions/comments from the audience. We will conclude the program with a short 5 minute business meeting.
Second, the Practical Law Company, which is now a division of Thomson Reuters, is sponsoring a reception in honor of the Section. Here are the details:
Event: Thomson Reuters Reception for the AALS Section on Transactional Law and Skills
Date/Time: Friday, January 3, 2014, 6:30-8:30 pm
Location: Conference Room F, Executive Conference Center, Sheraton New York, 811 7th Avenue 53rd Street, New York, NY 10019
Sunday, December 8, 2013
Based on the chart below, which reflects 35 years of large law firm data, the answer appears to be yes. The chart enables us to compare two very simple trendlines: the percentage of lawyers in NLJ 250 law firms who have the title of Associates versus the percentage with the title of Partner.
The chart above was generated by my colleague, Evan Parker-Stephen, who is Director of Analytics at Lawyer Metrics. I asked Evan to crunch these data after some of research I was working on revealed a 50% decline in Summer Associate hiring between 2002 and 2012 at the ~600 law firms listed in the NALP Directory (11,302 to 5,584). In other words, 2008 is the wrong reference point. See Sea Change, NALP Bulletin (Aug 2013). Something more substantial was (is) happening.
Indeed, the 35-year graphic above provides a true wide-angle view, which in turn reveals an absolutely remarkable story. Associates were most integral to the large law firm model over 25 years ago. Although large law firms went on a hirng spree at various points during the 1990s and 2000s, the firms themselves were simultaneously adding a new layer of human capital that was neither associate or partner/owner. And in the process, associates were gradually being marginalized. The graph below (also NLJ 250 data) reveals the growing middle section of the so-called Diamond Model:
So what does all this mean?
My best analysis is set forth in a short research monograph I wrote with Evan, entitled "The Diamond Law Firm: A New Model or the Pyramid Unraveling?" The punchline is that large law firms appear to be chasing short-term profits at the expense of longer-term sustainability. It would not be the first industry sector to lose its competitive advantage through myopic strategy -- as the saying goes, nothing fails like success. See Henderson, Three Generations of U.S. Lawyers: Generalist, Specialist, Project Manager. Large firms are not going extinct. But as a matter of demographics, they are greying. If BigLaw were trading on the Nasdaq, the analysts would be very critical of this trend.
December 8, 2013 in Blog posts worth reading, Data on the profession, Important research, Law Firms, New and Noteworthy, Scholarship on the legal profession, Structural change | Permalink | Comments (9)
Sunday, December 1, 2013
Over at Big Think, Nitin Nohria, the dean of the Harvard Business School, talks about three archetypes of business people: entrepreneurs, managers and leaders. His point is that leadership really takes place at the end of a great idea's life cycle, when the game isn't what it used to be: "To unwind existing commitments is the real hard task of leaders."
That ought to be provocative over on this side of the street.
As lawyers, most of the time we talk about locking in commitments, most of our focus is on rights, privileges, and powers of the obligee or the duties of the obligor, and we teach first-year contracts in cases of warriors defending those commitments. In the same blunt instrument mode, you could think of "unwinding" as brute as somebody saying to one's lawyer, "Find a way to break this contract."
It takes a different mental model to be able to see yesterday's commitment not as a citadel to be defended, but as a once-mighty oak rotting from the inside out.
Then again, if it's principled occasionally to be unprincipled, how do you know when to fight and when to compromise? As lawyers, we tend not to do real well with paradox either.
In 2012, Bruce Kobayashi and the George Mason Law & Economics Center organized an ambitious conference series entitled, "Unlocking the Law: Building on the Work of Professor Larry Ribstein." The collective work product has recently been published in the International Review of Law & Economics.
My contribution was an essay entitled "From Big Law to Lean Law." It is a review of Larry's seminal "The Death of Big Law" article, with the benefit of three years of data and the gradual realization that the entire legal profession is on the brink of a major structural transformation.
The "Death of Big Law" first appeared on SSRN in the fall of 2009. The following spring, I attended the annual Georgetown Center on the Legal Profession conference, where Larry's analysis and conclusions were presented to a large audience of Big Law partners, including managing partner commentators. Suffice to say, the reaction was one of polite bafflement.
"From Big Law to Lean Law" was my best attempt to serve as a translator, albeit with the benefit of three years of market data and hindsight. Here is the abstract
In a provocative 2009 essay entitled The Death of Big Law, the late Larry Ribstein predicted the shrinkage, devolution, and ultimate demise of the traditional large law firm. At the time virtually no practicing lawyer took Larry seriously. The nation’s large firms were only one year removed from record revenues and profits. Several decades of relentless growth had conditioned all of us to expect the inevitable rebound. Similarly, few law professors (including me) grasped the full reach of Larry’s analysis. His essay was not just another academic analysis. Rather, he was describing a seismic paradigm shift that would profoundly disrupt the economics of legal education and cast into doubt nearly a century of academic conventions. Suffice to say, the events of the last three years have made us humbler and wiser.
This essay revisits Larry’s seminal essay. Its primary goal is to make Larry’s original thesis much more tractable and concrete. It consists of three main pillars: (1) the organizational mindset and incentive structures that blinds large law partners to the gravity of their long-term business problems; (2) a specific rather than abstract description of the technologies and entrepreneurs that are gradually eating away at the work that has traditionally belonged to Big Law; and (3) the economics of the coming “Lean Law” era. With these data in hand, we can begin the difficult process of letting go of old ideas and architecting new institutions that better fit the needs of a 21st century economy.
(SSRN link.) In the service of explaining these complex market dynamics to lawyers, legal educators, and law students, I am posting the figures used in the paper, which can be downloaded from Slideshare.